CEMENT

Positive
The effective rate of tax for cement companies is now 25%. If GST rates are fixed at 18-20% then the
overall tax incidence will be lower GST IS expected to lead to savings in transportation cost, which
currently comprises up to 20-25% of total revenue. One common market will bring down the number of
depots in the country. Ultratech states that its depots will come down to 100 from 550 at present.

Key beneficiaries : Pan India players such as UltraTech, ACC, Ambuja and Shree Cement

Impact of GST on Cement Industry

GST implementation will bring good news for cement industry in India. Significant tax reduction is
being expected by experts for this sector of economy. Currently, the prevalent tax rates are 27-
32% but GST will bring the rates down to 18-20%. The new tax system will help cement industry
in reducing their logistics costs. GST will also cover logistics and warehousing industry. Cement
industry is heavily dependent on logistics and warehousing industry which contribute to 20-25%
of their revenue generation.

Indian cement industry is aimed to grow at a CAGR of 11.14% in volume terms during FY 2011-FY
2017 and is expected to reach 407 million tons by March 2017. This robust growth rate will
further be boosted by GST. Several big names among cement manufacturers, such as Ultratech,
JK Cement, and Shree Cement are expected to benefit from the new tax reform in India. The
reports suggest that the introduction of Goods and Services Tax in India will certainly benefit the
Indian cement industry and improve their profitability as well. GST India is likely to have a
positive impact on the cement industry and will also benefit the concrete admixtures
manufacturing sector.

According to a recent report, India Naphthalene and PCE based Admixtures Market By Type,
Competition Forecast & Opportunities, 2011 2021, naphthalene and polycarboxylate (PCE)
admixtures market in India is expected to reach USD 683 million by the year 2021. Real estate
sector is the major consumer for cement industry. However the growth in the sector has been
nearly stagnant for the past few years. Several reforms taken by the government are expected to
give realty sector a boost. Strong growth in the real estate sector, increasing government
projects on infrastructure development and implementation of stringent regulatory norms will
help in boosting demand for naphthalene and polycarboxylate (PCE) based admixtures in India by
the coming next five years. Again the major names among the naphthalene and PCE based
admixtures manufacturers in the country include BASF, Fosroc and SIKA.

Cement India is the second largest producer in the world and in the next 10 years, India can
become the net exporter of cement and clinker. The main raw materials for cement are
limestone, coal and electricity. Limestone, for quarrying, the cement companies have to pay
royalty to the state governments and for coal, apart from the GST, there will be levy of clean
energy cess which is not available as a credit because it is not part of the GST regime subsumes.
So, therefore, as far as the cement industry is concerned, these two factors will continue to be
outside the GST and therefore, it has to be absorbed as cost of the cement production.

If GST is levied on electricity, again it is going to increase the cost. So we hope all this is available
as a credit while paying GST on the cement.

The service tax paid on the transportation cost, etc. if it is not made available at the dealers
level, all becomes cost of the cement production and unless and until the rates of GST on cement
is kept at the level of not more than 12 percent, it is going to have adverse impact as far as the
infrastructure industry is concerned.

GST - A Boon for the Indian Cement Industry

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India: Transition to GST (Goods and Services Tax) in India is expected to reduce tax rate for the cement sector to 18-20%, from the
current tax rates of around 27-32%. A significant reduction in indirect tax on the cement industry is anticipated to aid the cement
companies to save on their logistic costs, due to rationalization of warehouses and lower transportation costs (comprising up to 20-
25% of total revenue). Cement industry in India is the second largest producer across the globe and it is forecast to become the net
exporter of cement and clinker over the next ten years. India cement industry is projected to grow at a CAGR of 11.14% in volume
terms during FY2011-FY2017F, and is forecast to reach 407 million tons by March, 2017. Major cement manufactures, such as JK
Cement, Ultratech and Shree Cement are expected to benefit from the restructuring of indirect taxes in India.

TechSci Research depicts that the introduction of Goods and Services Tax in India would benefit the India cement industry and improve
the profitability of domestic cement manufacturers. Improving conditions of the India cement industry is projected to have a positive
impact on the concrete admixtures industry of the country.

According to the recent report published by TechSci Research, Ind ia Naphthalene and PCE based Admixtures Market By Type,
Competition Forecast & Opportunities, 2011 2021, naphthalene and polycarboxylate (PCE) admixtures market in India is
projected to reach USD683 million by 2021. Strong growth in construction sector, increasing government emphasis on infrastructure
development and implementation of stringent regulatory norms is expected to continue boosting demand for naphthalene and
polycarboxylate (PCE) based admixtures in India over the next five years. Few of the major naphthalene and PCE based admixtures
manufacturers operating in the country include BASF, SIKA and Fosroc, among others.

GST Impact on the Indian Cement Industry

September 13, 2016 Subodh Kumawat GST Articles
Last updated on March 08, 2017
The implementation of GST in the country will empower the cement industry. It is expected that the tax rates
could get reduced to 18-20% from the current tax rates of 27-32%. This significant reduction in the tax rates of
the cement industry will help the cement companies to save money in logistics costs. Overall, the GST will also
include the warehousing and logistics sector, which is used by the cement companies on a large scale. The
warehousing and transportation sector comprise of revenue generation up to 20-25%.

Indian cement industry is aimed to grow at a CAGR of 11.14% in volume terms during FY 2011-FY 2017 and is
expected to reach 407 million tons by March 2017. Prominent cement manufacturers, such as Ultratech, JK
Cement, and Shree Cement are expected to benefit from the new tax reform in India.
Read Also: Fat Tax in India: All You Need to Know

The reports suggest that the introduction of Goods and Services Tax in India will certainly benefit the Indian
cement industry and improve their profitability as well. GST India is likely to have a positive impact on the
cement industry and will also benefit the concrete admixtures manufacturing sector.

According to a recent report, India Naphthalene and PCE based Admixtures Market By Type, Competition
Forecast & Opportunities, 2011 2021, naphthalene and polycarboxylate (PCE) admixtures market in India is
expected to reach USD 683 million by the year 2021. Strong growth in real estate sector, increasing government
projects on infrastructure development and implementation of stringent regulatory norms will help in boosting
demand for naphthalene and polycarboxylate (PCE) based admixtures in India by the coming next five years.
Few of the prominent names in the naphthalene and PCE based admixtures manufacturers in the country
include BASF, Fosroc and SIKA.

The following concerns regarding the Cement Industry have been expressed by V Lakshmikumaran, Managing
Partner, Lakshmikumaran & Sridharan, Cement India is the second largest producer in the world and in the
next 10 years, India can become the net exporter of cement and clinker. The main raw materials for cement are
limestone, coal and electricity. Limestone, for quarrying, the cement companies have to pay royalty to the state
governments and for coal, apart from the GST, there will be levy of clean energy cess which is not available as a
credit because it is not part of the GST regime subsumes. So, therefore, as far as the cement industry is
concerned, these two factors will continue to be outside the GST and therefore, it has to be absorbed as cost of
the cement production.

Recommended: GST Impact on Automobile Industry in India

If GST is levied on electricity, again it is going to increase the cost. I hope all this is available as a credit while
paying GST on

the cement, he added.

Moreover, he further clarified The service tax paid on the transportation cost, etc. if it is not made available at
the dealers level, all becomes cost of the cement production and unless and until the rates of GST on cement is
kept at the level of not more than 12 percent, it is going to have adverse impact as far as the infrastructure
industry is concerned.

India is notorious for its complex tax system. For new businesses and startups, it becomes impossible to
navigate through various direct and indirect taxes. Constant changes to taxes like Service Tax are making
things even worst. But now, the things are set to change with new Goods and service tax commonly known
as GST.

Lets understand what is GST, how it is different from other taxes, GST applicability, GST rates, its impact on
your business and latest updates about GST bill. To make things easy to understand, I will start with an
example..

Mr. Sharma is a businessman who wants to start a business. For this he needs various raw materials which
have to be imported from China and will need to be brought to Gurgaon where he has his factory by road
through various states. Once he gets down on the process of estimating his costs he is a little troubled.
First, he needs to pay a customs duty for importing the materials on top of the shipping charges. This is fine but
there are a lot of other taxes which he seems to be unable to comprehend. Also he finds out that when he has
his final product ready he will have paid the Central and State Governments at least 10 different taxes not all of
which are exclusive of each other. On diving deeper he finds many cases where a tax is also taxed by the
government.

Petrol prices are the perfect example. The price charged to dealers by the Oil Marketing Companies is Rs.
25.46 currently for a litre of petrol. Now Excise Duty is collected at Rs. 21.48 per litre by the Central
Government and adding the dealer commission the price now is Rs. 49.22. This is not the end and Value
Added Tax is now charged at 27% which takes the final price to Rs. 62.51 in Delhi. At first it may seem fair that
both the Governments tax the product but it is not that innocuous. There is a tax on a tax here! The State
Government charges 27% of the final amount in which Central Excise Duty has already been borne by the
businessman.

The Goods and Services Tax promises to alleviate this problem among many others. It is being hailed as the
game changer for Indias economy and is being labelled as the biggest change in the Constitution since Indias
independence. The Goods and Services tax or commonly referred to as the GST will replace the indirect taxes
levied by the Central and State Governments and provide for a single and streamlined process. It presents
India as a unified market to business owners and also aims at bringing a lot of black money back into the
mainstream economy. The tax will be implemented at every step of value creation.

Example Of GST Calculation

Let us assume that the GST is set at 20%. Suppose that the manufacturing cost of a Product A is 100 and
assuming a GST of 20% the total amount is Rs. 120. The next step of taxation would be when the Product is
sold to consumers, lets say at a price of 150. So the GST will charge another 20% on just the difference of Rs.
150 and Rs. 120 i.e. only 20% on Rs. 30 which is equal to Rs. 6. So the final price is Rs. 150 + Rs. 6. Unlike
the case of petrol pricing there is no tax on a tax now. This eliminates the cascading effect of taxes which is
very prevalent in our economy and has been simplified to an elemental level in the example.

Since the GST will be applied at every step of value creation it will be very difficult for black money owners to
participate anywhere in the value chain with the GST without accounting for all other transactions. The GST is
estimated to provide an immediate boost of 0.9% 1.4% of the GDP.
10 Frequently Asked Questions About GST Bill.

1) What are final GST rate slabs?

The Goods and Services Tax (GST) will be levied at multiple rates ranging from 0 per cent to 28 per cent. GST
Council finalised a four-tier GST tax structure of 5%, 12%, 18% and 28%, with lower rates for essential items
and the highest for luxury and de-merits goods that would also attract an additional cess.

Service Tax will go up from 15% to 18%. The services being taxed at lower rates, owing to the provision of
abatement, such as train tickets, will fall in the lower slabs.

In order to control inflation, essential items including food, which presently constitute roughly half of the
consumer inflation basket, will be taxed at zero rate.

The lowest rate of 5% would be for common use items. There would be two standard rates of 12 per cent and
18 per cent, which would fall on the bulk of the goods and services. This includes fast-moving consumer goods.

Highest tax slab will be applicable to items which are currently taxed at 30-31% (excise duty plus VAT).

Ultra luxuries, demerit and sin goods (like tobacco and aerated drinks), will attract a cess for a period of five
years on top of the 28 per cent GST.

The collection from this cess as well as that of the clean energy cess would create a revenue pool which would
be used for compensating states for any loss of revenue during the first five years of implementation of GST.

Finance minister said that the cess would be lapsable after five years.

The structure to agreed is a compromise to accommodate demand for highest tax rate of 40% by states like
Kerala.
While the Centre proposed to levy a 4% GST on gold but the final decision on this was put off. During a press
conference, finance minister Mr. Jaitley said, GST rate on gold will be finalised after the fitting to the approved
rates structure of all items is completed and there is some idea of revenue projections.

The principle for determining the rate on each item will be to levy and collect the GST at the rate slab closest to
the current tax incidence on it.

The GST will subsume the multitude of cesses currently in place, including the Swachh Bharat Cess, the Krishi
Kalyan Cess and the Education Cess. Only the Clean Environment Cess is being retained, revenues from
which will also fund the compensations.
 2) What are CGST, SGST and IGST?

India is a federal democracy that is one which has clear demarcation of powers, responsibility and revenue
collection between the states and the centre in its constitution. For example law and order falls under the
states jurisdiction while the nations defence is the centres responsibility. The GST too needs to have clear
provisions on what areas the centre and the state are allowed to collect revenue from taxation to prevent an
overlapping.

The Central GST or CGST is the areas where the centre has the powers and State GST where the State has
taxation capabilities. The IGST or Integrated GST is for movement of goods within the states of the Indian
union. This will be collected by the union however will be transferred over to the states. Thus it is essential that
if and when the GST comes out it is rolled over in the entire nation simultaneously.

3) What are the differences between the UPAs GST and the NDAs
GST?

Below are the primary differences:

Petroleum sector has been kept out of the ambit of GST

Liquor for human consumption is exempt however tobacco and tobacco products will fall under GST.
There is a 1% tax on top of the GST for inter-state movement of goods and services.

4) What are the taxes that GST replaces?

The GST replaces numerous different indirect taxes such as:

1. Central Excise Duty

2. Service Tax
3. Countervailing Duty
4. Special Countervailing Duty
5. Value Added Tax (VAT)
6. Central Sales Tax (CST)
7. Octroi
8. Entertainment Tax
9. Entry Tax
10. Purchase Tax
11. Luxury Tax
12. Advertisement taxes
13. Taxes applicable on lotteries.
5) What will be the short-term impact of GST?

The GST will fuel inflation for the short term. The GST rate starts at 5% and 18% taxation services such as
restaurants, movies etc. are bound to increase prices. Another problem with the GST that many pundits feel is
not including liquor and petroleum under GSTs ambit. These are major revenue sources for the government
and experts feel this is being done due to a few crony capitalists who need some time to funnel away their
black money as the GST promises to widen the tax paying population.

Also read Impact on GST on E-Commerce

6) When will GST be implemented?

Government may not be able to meet the initial GST implementation date of 1st April 2017. Its widely assumed
that GST rollout will start only after 1 July 2017.

Keep checking the article for latest updates.

7) What is a constitutional amendment?

A Constitutional Amendment as the name suggests is any change in the Constitution. A democracy like India
derives all its rules and laws from the Constitution and hence any change in the Constitution is a change in the
fundamental fabric of the country. The GST is the One Hundred and Twenty Second such proposed
amendment and hence is named The Constitution (One Hundred and Twenty-Second Amendment) Bill, 2014.

In simple terms bills other than the Constitution Amendment Bill are just modifications to topics that area
already mentioned in the constitution. The introduction of a few new IITs is a perfect example. All these require
are a simple majority in both the houses and the Presidents Approval. However the GST requires a
Constitution Amendment Bill which is a direct change in the Constitution and requires two-thirds of the votes in
both Lok Sabha and Rajya Sabha.

8) What are the finer points in the implementation of the bill?

Several committees were setup to evaluate the feasibility and implementation of the GST. Some fine points
which were considered are:
1. The problem of separating the taxation powers of the state and the centre which resulted in CGST and
SGST.
2. Exemptions from the GST which currently includes Petroleum and Liquor for human consumption.
3. GST will be applicable on imports too along with the Basic Customs Duty which has not been
scrapped.
4. The GST will be applicable at the point of sale. In comparison the Value Added Tax is a destination
based tax while excise duties are taxed at the origin.
5. The workings in the implementation of IGST.

9) What is the Empowered Committee?

The Empowered Committee is a committee of the Finance Ministers of the states. It was set up by the
Vajpayee Government to look into the Value Added Tax model. The committee has had an influential hand in
shaping and structuring of the GST.

10) What will become costlier and cheaper?

According to experts, these items could become costlier:

Cigarette prices likely to go up as GST rate for tobacco will be higher than current duties
Commercial vehicles such as trucks will become costlier
Mobile phone calls may get costlier as service tax will go up
Textile and branded jewellery may become costlier

And these could become cheaper:

Auto: Prices of entry-level cars, two-wheelers, SUVs may fall

Car batteries likely to get cheaper
Paint, cement prices likely to fall
Movie ticket prices likely to fall as entertainment tax will come down
Electronics items like fans, lighting, water heaters, air coolers, etc. will get cheaper

Effective date of GST will be 1st July 2017 once the bill is passed in Rajyasabha. For further reading you can
refer to Ministry of Finance. Here is the complete draft of GST.
Is Your Business Ready For GST?

If you are running your business in India, its important for your to become GST compliant. At ProfitBooks, our
aim is to simplify GST for business owners. Thats why weve built a super simple accounting software to create
GST compliant invoices, record expenses, track inventory and finally automatically prepare GST-ready tax
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Weve a network of chartered accountants who can help you with your tax questions for free. Over 10,000
business use ProfitBooks daily to manage their finances.

1) What is the taxable event under GST?

Supply of goods and/or services. CGST & SGST will be levied on intra-state supplies while IGST will be levied
on inter-state supplies. The charging section is section 7 (1) of CGST/SGST Act and Section 4(1) of the IGST
Act.

2) Is the reverse charge mechanism applicable only to services?

No, reverse charge applies to supplies of both goods and services.

3) What will be the implications in case of purchase of goods from

unregistered dealers?

The receiver of goods will not be able to get ITC. Further, the recipients who are registered under composition
schemes would be liable to pay tax under reverse charge.
4) In respect of exchange of goods, namely gold watch for
restaurant services will the transaction be taxable as two different
supplies or will it be taxable only in the hands of the main
supplier?

No. In the above case the transaction of supply of watch from consumer to the restaurant will not be an
independent supply as the same is not in the course of business. It is a consideration for a supply made by the
restaurant to him. The same will be a taxable supply by the restaurant.

5) Whether supplies made without consideration will also come

within the purview of Supply under GST?

Yes only those cases which are specified under Schedule I to the Model GST Law.

6) Who can notify a transaction to be supply of goods and/or

services?

Central Government or State Government on the recommendation of the GST Council can notify a transaction
to be the supply of goods and/or services.

7) Will a taxable person be eligible to opt for composition scheme

only for one out of 3 business verticals?

No, composition scheme would become applicable for all the business verticals/registrations which are
separately held by the person with same PAN.

8) Can composition scheme be availed if the taxable person effects

inter-State supplies?

No, composition scheme is applicable subject to the condition that the taxable person does not affect interstate
supplies.
9) Can the taxable person under composition scheme claim input
tax credit?

No, taxable person under composition scheme is not eligible to claim input tax credit.

10) Can the customer who buys from a taxable person who is
under the composition scheme claim composition tax as input tax
credit?

No, customer who buys goods from taxable person who is under composition scheme is not eligible for
composition input tax credit because a composition scheme supplier cannot issue a tax invoice.

11) Can composition tax be collected from customers?

No, the taxable person under composition scheme is restricted from collecting tax. It means that a composition
scheme supplier cannot issue a tax invoice.

12) What is the threshold for opting to pay tax under the
composition scheme?

The threshold for composition scheme is Rs. 50 Lakhs of aggregate turnover in financial year.

13) How to compute aggregate turnover to determine eligibility

for composition scheme?

The methodology to compute aggregate turnover is given in Section 2(6). Accordingly, aggregate turnover
means Value of all supplies (taxable and non-taxable supplies + Exempt supplies + Exports) and it excludes
Taxes levied under CGST Act, SGST Act and IGST Act, Value of inward supplies + Value of supplies taxable
under reverse charge of a person having the same PAN.
14) What are the penal consequences if a taxable person violates
the condition and is not eligible for payment of tax under the
Composition scheme?

Taxable person who was not eligible for the composition scheme would be liable to pay tax, interest and in
addition he shall also be liable to a penalty equivalent to the amount of tax payable. (Section 8 (3) of the MGL).

15) What is the minimum rate of tax prescribed for composition

scheme?

Minimum rate has been prescribed as 1%.

16) When exemption from whole of tax collected on goods and/or

services has been granted unconditionally, can taxable person pay
tax?

No, the taxable person providing such goods or services shall not collect the tax on such goods or services.

17) What is remission of tax/duty?

It means relieving the tax payer from the obligation to pay tax on goods when they are lost or destroyed due to
any natural causes. Remission is subject to conditions stipulated under the law and rules made thereunder.

18) Whether remission is allowed under GST law?

Yes, proposed section 11 of Model GST law permits remission of tax on supply of goods.
19) Whether remission is allowed for goods lost or destroyed
before supply?

Remission of tax will apply only when tax is payable as per law i.e. taxable event should have happened and
tax is required to be paid as per law. Under GST Law, levy is applicable upon supply of goods. Where goods
are lost or destroyed before supply, taxable event does not occur in order to pay tax. Accordingly, question of
remission of tax does not rise.

20) Whether remission is allowed on goods lost or destroyed for all

reasons?

No, on plain reading of the language of proposed Section 11, remission is allowed only for those cases where
supply of goods is found to be deficient in quantity due to natural causes.

21) Does the model GST Law empower the competent government
to exempt supplies from the levy of GST?

Yes. Under Section 10 of the Model GST Law, the Central or the State Government, on the recommendation of
the GST council can exempt the supplies from the levy of GST either generally or subject to conditions.

1) What are the Payments to be made in GST regime?

In the GST regime, for any intra-state supply, taxes to be paid are the Central GST (CGST, going into the
account of the Central Government) and the State GST (SGST, going into the account of the concerned State
Government). For any inter-state supply, tax to be paid is Integrated GST (IGST) which will have components
of both CGST and SGST.

In addition, certain categories of registered persons will be required to pay to the government account Tax
Deducted at Source (TDS) and Tax Collected at Source (TCS). In addition, wherever applicable, Interest,
Penalty, Fees and any other payment will also be required to be made.
 2) Who is liable to pay GST?

In general the supplier of goods or service is liable to pay GST. However in specified cases like imports and
other notified supplies, the liability may be cast on the recipient under the reverse charge mechanism. Further,
in some cases, the liability to pay is on the third person (say in the case of e-commerce operator responsible
for TCS or Government Department responsible for TDS).

3) When is GST payment to be done by the taxable person?

At the time of supply of Goods as explained in Section 12 and at the time of supply of services as explained in
Section 13. The time is generally the earliest of one of the three events, namely receiving payment, issuance of
invoice or completion of supply. Different situations envisaged and different tax points have been explained in
the aforesaid sections.

4) What are the main features of GST payment process?

The payment processes under proposed GST regime will have the following features:

Electronically generated challan from GSTN Common Portal in all modes of payment and no use of
manually prepared challan;
Facilitation for the taxpayer by providing hassle free, anytime, anywhere mode of payment of tax;
Convenience of making payment online;
Logical tax collection data in electronic format;
Faster remittance of tax revenue to the Government Account;
Paperless transactions;
Speedy Accounting and reporting;
Electronic reconciliation of all receipts;
Simplified procedure for banks;
Warehousing of Digital Challan.

5) How can payment be done?

GST Payment can be done by the following methods:

(i) Through debit of Credit Ledger of the taxpayer maintained on the Common Portal- ONLY Tax can be paid.
Interest, Penalty and Fees cannot be paid by debit in the credit ledger. Tax payers shall be allowed to take
credit of taxes paid on inputs (input tax credit) and utilize the same for payment of output tax. However, no input
tax credit on account of CGST shall be utilized towards payment of SGST and vice versa. The credit of IGST
would be permitted to be utilized for payment of IGST, CGST and SGST in that order.

(ii) In cash by debit in the Cash Ledger of the taxpayer maintained on the Common Portal. Money can be
deposited in the Cash Ledger by different modes, namely, E-Payment (Internet Banking, Credit Card, Debit
Card); Real Time Gross Settlement (RTGS)/ National Electronic Fund Transfer (NEFT); Over the Counter
Payment in branches of Banks Authorized to accept deposit of GST.

6) When is payment of taxes to be made by the Supplier?

Payment of taxes by the normal taxpayer is to be done on monthly basis by the 20th of the succeeding month.
Cash payments will be first deposited in the Cash Ledger and the taxpayer shall debit the ledger while making
payment in the monthly returns and shall reflect the relevant debit entry number in his return. As mentioned
earlier, payment can also be debited from the Credit Ledger. Payment of taxes for the month of March shall be
paid by the 20th of April. Composition tax payers will need to pay tax on quarterly basis. Timing of payment will
be from 0000 Hrs to 2000 Hrs.

7) Whether time limit for payment of tax can be extended or paid

in monthly installments?

No, this is not permitted in case of self-assessed liability. In other cases, competent authority has been
empowered to extend the time period or allow payment in installments. (Section 55 of MGL).

8) What happens if the taxable person files the return but does not
make payment of tax?

In such cases, the return is not considered as a valid return. Section 27 (3) of the MGL provides that the return
furnished by a taxable person shall not be treated as valid return unless the full tax due as per the said return
has been paid. It is only the valid return that would be used for allowing input tax credit (ITC) to the recipient. In
other words, unless the supplier has paid the entire self-assessed tax and filed his return and the recipient has
filed his return, the ITC of the recipient would not be confirmed.

As per section 28, a taxable person who has not furnished a valid return shall not be allowed to utilize such
credit till he discharges his self-assessed tax liability.
9) Which date is considered as date of deposit of the tax dues-
Date of presentation of cheque or Date of payment or Date of
credit of amount in the account of government account?

It is the date of credit to the Government account.

10) What are E-Ledgers?

Electronic Ledgers or E-Ledgers are statements of cash and input tax credit in respect of each registered
taxpayer. In addition, each taxpayer shall also have an electronic tax liability register. Once a taxpayer is
registered on Common Portal (GSTN), 2 e-ledgers (Cash & Input Tax Credit) and an electronic tax liability
register will be automatically opened and displayed on his dashboard at all times.

11) What is a tax liability register?

Tax Liability Register will reflect the total tax liability of a taxpayer (after netting) for the particular month.

12) What is a Cash Ledger?

The cash ledger will reflect all deposits made in cash, and TDS/TCS made on account of the taxpayer. The
information will be reflected on real time basis. This ledger can be used for making any payment on account of
GST.

13) What is an ITC Ledger?

Input Tax Credit as self-assessed in monthly returns will be reflected in the ITC Ledger. The credit in this ledger
can be used to make payment of TAX ONLY and not other amounts such as interest, penalty, fees etc.

14) What is the linkage between GSTN and the authorized Banks?

There will be real time two way linkage between the GSTN and the Core Banking Solution (CBS) of the Bank.
CPIN is automatically routed to the Bank via electronic string for verification and receiving payment and a
challan identification number (CIN) is to automatically sent by the Bank to the Common Portal confirming
payment receipt. No manual intervention will be involved in the process by any one including bank cashier or
teller or the taxpayer.

15) How to create or modify GST challan?

A taxpayer can create a challan from GSTN portal for the purpose of payment of taxes. The payment
particulars have to be fed in by the tax payer or his authorized person. Its possible to fill in the challan form
partially and temporarily save the challan for completion at a later stage. A saved challan can be edited
before finalization. After the tax payer has finalized the challan, it will be generated. The remitter will have
option of printing the challan for his record.

Its important to note that once a challan is generated online, it can not be modified. He can save the challan
midway for future editing. However once the challan is finalized and CPIN generated, no further changes can
be made to it by the taxpayer.

16) Is there a validity period of challan?

Yes, a challan will be valid for fifteen days after its generation and thereafter it will be purged from the System.
However, the taxpayer can generate another challan at his convenience.

17) What is a CPIN?

CPIN stands for Common Portal Identification Number (CPIN) given at the time of generation of challan. It is a
14 digit unique number to identify the challan. As stated above, the CPIN remains valid for a period of 15 days.

18) What is a CIN and what is its relevance?

CIN stands for Challan Identification Number. It is a 17 digit number that is 14-digit CPIN plus 3-digit Bank
Code. CIN is generated by the authorized banks/ Reserve Bank of India (RBI) when payment is actually
received by such authorized banks or RBI and credited in the relevant government account held with them. It is
an indication that the payment has been realized and credited to the appropriate government account. CIN is
communicated by the authorized bank to taxpayer as well as to GSTN.
19) What is the sequence of payment of tax where that taxpayer
has liabilities for previous months also?

Section 35(8) prescribes an order of payment where the taxpayer has tax liability beyond the current return
period. In such a situation, the order of payment to be followed is: First self-assessed tax and interest for the
previous period; thereafter self-assessed tax and interest for the current period; and thereafter any other
amounts payable including any confirmed demands under section 51. This sequence has to be mandatorily
followed.

20) What is an E-FPB?

E-FPB stands for Electronic Focal Point Branch. These are branches of authorized banks which are authorized
to collect payment of GST. Each authorized bank will nominate only one branch as its E-FPB for pan India
Transactions. The E-FPB will have to open accounts under each major head for all governments. Total 38
accounts (one each for CGST, IGST and one each for SGST for each State/UT Govt.) will have to be opened.
Any amount received by such E-FPB towards GST will be credited to the appropriate account held by such E-
FPB. For NEFT/RTGS Transactions, RBI will act as E-FPB.

21) What is TDS under GST Regime?

TDS stands for Tax Deducted at Source (TDS). As per section 37, this provision is meant for Government and
Government undertakings and other notified entities making contractual payments in excess of Rs.10 Lakhs to
suppliers. While making such payment, the concerned Government/authority shall deduct 1% of the total
payable amount and remit it into the appropriate GST account.

22) How will the Supplier account for this TDS while filing his
return?

Any amount shown as TDS will be reflected in the electronic cash ledger of the concerned supplier. He can
utilize this amount towards discharging his liability towards tax, interest fees and any other amount.

23) How will the TDS Deductor account for such TDS?

The TDS Deductor will account for such TDS in the following ways:
1. Such deductors needs to get compulsorily registered under section 19 read with Schedule III of MGL.
2. They need to remit such TDS collected by the 10th day of the month succeeding the month in which
TDS was collected and reported in GSTR 7.
3. The amount deposited as TDS will be reflected in the electronic cash ledger of the supplier.
4. They need to issue certificate of such TDS to the deductee within 5 days of deducting TDS failing
which fees of Rs. 100 per day subject to maximum of Rs. 5000/- will be payable by such deductor.

24) What is Tax Collected at Source (TCS)?

This provision is applicable only for E-Commerce Operator under section 43C of MGL. Every E-Commerce
Operator needs to withhold a percentage (to be notified later on the recommendation of the GST Council) of
the amount which is due from him to the supplier at the time of making actual payment to the supplier. Such
withheld amount is to be deposited by such E-Commerce Operator to the appropriate GST account by the 10th
of the next month. The amount deposited as TCS will be reflected in the electronic cash ledger of the supplier.

25) Is the pre-registration of credit card necessary in the GSTN

portal for the GST payment?

Yes. The taxpayer would be required to pre-register his credit card, from which the tax payment is intended,
with the Common Portal maintained on GSTN. GSTN may also attempt to put in a system with banks in getting
the credit card verified by taking a confirmation from the credit card service provider. The payments using credit
cards can therefore be allowed without any monetary limit to facilitate ease of doing business.

SAP
# Solution

1 Customer continues to be on
Migrate to condition based tax procedure (TAXINN), if not already
# Solution

ECC

Help you assess the impact to various business processes

Guide you in your discussions with business partners, considering th

2 OR Customer migrates to
S/4HANA Map your enterprise GST Registration Numbers in SAP

Help prepare your relevant Master Data to store GST relevant details
Services, etc.)

Validating the various business processes like order-to-cash, procure

Final Migration and Cutover to GST Framework